Toronto, Montreal among most expensive cities Toronto and Montreal rank among the world's 20 priciest cities, according to a new study. But, for Toronto, at least, buying power lags, suggesting Torontonians have to stretch a bit more to make their way in Canada's financial capital.

Vancouver, Canada's most bubbly housing market, wasn't among the 73 cities studied. (When I first called UBS to ask about Vancouver, the folks that could help me were at lunch, in Zurich, the world's second-most expensive city.)

In terms of gross wages, Toronto ranks 14th and Montreal 15th. And by domestic purchasing power based on gross hourly pay, Montreal ranks 11th and Toronto 15th.

In its last study, Toronto ranked 8th and Montreal ninth among the top 20 cities in terms of expense. Rounding out the top 10 this year are Oslo, Zurich, Geneva, Copenhagen, Stockholm, Toky, Sydney, Helsinki, and, after Toronto, Singapore.

Merkel-Sarkozy plans fail to impress Investors feel they've been let down by the meeting of the minds in the euro zone yesterday.

Germany's Angela Merkel and France's Nicolas Sarkozy met at what was expected to be a key discussion on how to solve the debt crisis in the 17-member monetary union. They proposed a euro economic council, constituionally-guaranteed deficit control, and a financial tax.

Beyond what markets had hoped for - a bigger rescue fund for ailing governments, and a move toward a common euro bond - the tax proposal isn't gaining many friends.

The EU is now looking at drafting a plan it can present to a G20 summit later this year.

"This is something no one - other than euroland politicians - wants to see," said Carl Weinberg, chief economist at High Frequency Economics.

"If euroland institutions have to pay a transactions tax, all financial market actors will exit Europe for places where taxes are not imposed on their businesses," he said in a research note.

"Hello Asia? London? New York? Toronto? In any case, we are hard pressed to see how such a tax will help fix euroland's sovereign debt problem, unless it is so egregiously high that it might raise government revenue substantially. Traders do not like this kind of talk, even on a lazy summer afternoon."

Can't keep a good franc down The Swiss National Bank took fresh measures to try to hold down its soaring franc, but the move failed because markets had been expecting a possible currency peg.

The central bank said it would increase the sight deposits of banks, basically flooding the market with money, but the currency still strengthened.

"Standing back from short-term market expectations, the SNB’s decision not to announce a formal exchange rate target (... peg, crawling peg, floor, whatever form it might have taken) is entirely sensible," said Adam Cole, global chief of foreign exchange strategy at RBC in London.

"Firstly, what incentive does the central bank have to reveal its objective to the market? Doing so would simply give the market a target to aim for and the SNB would likely find itself in immediate fight to defend whatever arbitrary level it declared it was targeting. Secondly, making the case for an exchange rate target as a medium term policy objective would be extremely difficult."

Fairfax announced late yesterday it has acquired Toronto's William Ashley China, a luxury retailer that's known for its wedding registry. Fairfax is buying the retailer from the Stark family, which has owned Ashley for more than half a century.

"This acquisition is consistent with our interest in acquiring businesses from entrepreneurial founders who want to find a long term home for their business,” said Fairfax's CEO Prem Watsa.

(Just last month, Fairfax pumped money into Bank of Ireland. Ireland, of course, is known for its Belleek China and Waterford Crystal, though it's not actually produced there any longer.)

SABMiller goes hostile SABMiller PLC is putting its $10-billion (U.S.) bid for Australia's Foster's Group Ltd. to shareholders, having been rebuffed by its takeover target's board.

“As there has been no willingness to engage in relation to SABMiller’s proposal on the part of the Foster’s board, SABMiller has decided to make an offer to Foster’s shareholders directly," the brewer said today.

In
International Business today Seeking a jolt for a wilting economy, President Barack Obama will give a major speech in early September to unveil new ideas for speeding up job growth and helping the struggling poor and middle class. Ben Feller of The Associated Press reports.

In
Economy Lab today Soaring real estate prices in China are breaking up marriages, but not in the way you might expect. Unlike in North America, where high household debt levels are putting a lot of stress on families, Chinese couples are divorcing - or at least pretending to - in order to borrow more. The Globe and Mail's Dianne Nice reports.

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